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Sign Up for Purchase Email
You need to activate your Purchase email if you haven't already done it. All of you were assigned a Purchase email address upon enrollment. The format is...
You need to understand some basic concepts of how to analyze a firm's costs.
Fixed Cost
A fixed cost is a cost that does not vary with the quantity a firm produces.
Variable Cost
A variable cost is...
Amazon.com Slides
Amazon Financial Reports
See Amazon.com's 2007 Annual Report
See excerpted income statement Amazon07IncomeStatement.pdf (page 46 of 2007 Annual Report)
See Amazon historical...
The premise behind this class is that there are business and economics principles that apply to any kind of business, including businesses that use the internet.
Studying "The Internet and...
An internet business is just a business. It has revenues and costs, customers and competitors. But the internet has some unique characteristics that make internet businesses worth studying.
The...
Assessment for this Class - Subject to Revision!
25%: Class participation, involving small weekly assignments, contributions to the class wiki, attendance and in-class participation
30%: Group...
Homework Assignments.
This page is for homework assignments. For other assignments see Group Project, Individual Project and Exams.
LATE ASSIGNMENTS WILL NOT BE ACCEPTED.
If you need help, use the...
Here's an interesting (but long) interview with Hal Varian about the impact of the internet on pricing.
You're probably familiar with auctions. In a simple "open outcry" auction bidders announce...
According to ComScore, GM was the biggest online advertiser in January 2008.
Retail/Distribution
Cars Direct is a divisision of Internet Brands Inc.
BBC News Technology Feed
Blogging is a form of online publishing, inspired by the idea of a daily journal. The web makes it possible for anyone with some notion of web design to publish anything. Blogging tools such as...
Barnes and Noble Booksellers
Went online March 1997 with storefront on AOL
Tried to buy the largest book wholesaler - Ingram - but Federal Trade Commission opposed the deal because it might reduce...
Google is roiling the book industry with a plan to publish out of print books online1 (Gleick 2008)
In an 3/19/09 WSJ essay entitled "How the E-Book will Change the Way we Read and Write"2 (Johnson...
You need to understand the concept of a business model.
A business model specifies how you make money. It answers the question "What customer problem does this business solve, and how does it do so...
A business strategy specifies how a company will compete successfully. It answers the question "how will I beat my competitors?". Business strategy is also called "competitive strategy." To compete...
Situation where a manufacturer distributes products to customes using two or more channels, and the channels compete with one another. For example, HP Compaq sells computers using the direct...
Each class will feature:
A key topic related to the economics of the internet
An illustrative case study
A topic on the technology of the internet
Class interaction
Class participation is...
Topics:
Wikis
There are many enterprise wiki vendors
http://www.socialtext.com/
Prediction markets
InTrade
NYT article on InTrade's prediction accuracy
Crowdsourcing
See The Wisdom of...
In this class you need to be able to research companies. There are two types of companies: public companies and private companies.
Public companies are allowed to sell shares ("stock") to the...
If you are allowed to edit pages in this Site, simply click on edit button at the bottom of the page. This will open an editor with a toolbar pallette with options.
To create a link to a new page,...
You can reach me at ude.esahcrup|koorbaes.divad#ude.esahcrup|koorbaes.divad
My company web site is http://www.learnprofit.com
I write a blog about knowledge and business at...
The cost to acquire a customer. For a customer to be profitable for a firm, their customer acquisition cost must be less than their lifetime customer value. To illustrate: if it costs you $100 to...
Alaska Airlines has introduced a virtual travel agent.
SocialText has a list of Fortune 500 company blogs.
Virtual call centers e.g. those provided by http://www.liveops.com/
More and more firms...
Dating is just a form of search. Like any search, it can be time-consuming and expensive.
Just as Google made search faster and more efficient, dating sites have now turned to search algorithms to...
There are about 220 million internet users in the U.S., according to a March 28, 2008 Wall Street Journal article. The article describes why some market researchers believe that China has surpassed...
The Internet and Business - Catalog Course Description
Students examine the impact of the Internet on business and develop a solid foundation for evaluating current and future Internet business...
Definition
Disintermediation means "cutting out the middle man". The technical term for a "middle man" is "intermediary." It's the person between the buyer and the seller.
When buying a house, a...
What Does Doubleclick Do?
Here's an old New York Times article (from 1999!) that explains what Doubleclick does.
One of the challenges in internet advertising is to put the right ad on the right...
DUB Pies is as Brooklyn bakery that also sells its products online at http://dubpies.com
Hit the Refresh button on your browser if you don't see the embedded YouTube video below.
Pie Shop...
2007 financial highlights
$7.67 billion revenue
$2.11 billion net income (before adjustments)
33.1% operating margin (before adjustments)
Note: much higher than Amazon.com
Number one ecommerce...
Key economic concepts that explain how the internet and the web affect business:
A Firm's Costs
Auctions
Business Models
Customer Acquisition Cost
Economics of Attention
Economies of Scale
Lifetime...
The economics of attention refers to the scarcity of attention. The basic idea is that attention is valuable because it is scarce. Sellers (such as advertisers) will pay to get peoples'...
A firm exhibits economies of scale if the average cost of producing a good falls as the volume produced rises.
Fixed costs are an important source of economies of scale.
Example
Say a hamburger...
Some data suggest that online universities don't work for undergraduates, but may work for postgraduates.
Traditional Media Companies
espn360.com is a broadband TV channel for ESPN content that doesn't make it onto the television broadcast channels. Hulu.com - a streaming video site supported by NBC,...
Midterm Spring 2009 Take-Home Exam
Access the midterm here. Email your answers to ude.esahcrup|koorbaes.divad#ude.esahcrup|koorbaes.divad no later than 9:00 A.M. Monday March 16th 2009.
Final...
March 2009 stock sales reportedly value Facebook at between $2 and $4 billion, down from $15 billion at the time of the Microsoft investment.
April 2009 Forbes story on how Facebook may have...
Businesses often need to raise money to help operate the business. This is called financing the business.
There are two basic ways to raise money: borrowing money or selling shares in the business....
You need a basic understanding of financial accounting for this class. See also revenue, costs and profit. This page also provides a real example of analyzing an income statement using Amazon.com....
Insurance
As of January 2008 there's an intense advertising war between Progressive.com and AllState insurance. Progressive is promoting its aggregation function, where it acts as a source of all...
Google is everyone's darling business right now. The stock price is high, the company was rated the best company to work for, and it generates an enormous amount of positive media coverage. But...
This page is for the group project. For other assignments see Individual Project or Homework Assignments.
This page represents the latest information about the group project requirements. If there...
Welcome to the Internet and Business Wiki
What we're about…
This is the wiki for "The Internet and Business" class at the State University of New York at Purchase (see the course outline and...
This should be on your GROUP PROJECT WIKI, NOT the class wiki
Banana Republic http://bananarepublic.gap.com/ simin Kayod
Old Navy http://oldnavy.gap.com/
Gap http://www.gap.com/
Piperlime...
Link for Rebecca G
http://beckflute.pbworks.com, http://nkrchomes.pbworks.com
This page is for the optional individual make-up project. For other assignments see Group Project or Homework Assignments.
THIS PROJECT IS OPTIONAL
Worth a maximum of ten percent of your...
This page talks about industry structure analysis and Porter's Five Forces model. The model was first published in the Harvard Business Review. You can see an updated 2008 version at Porter...
Information Goods
An information good is anything that can be digitized (Shapiro and Varian(1999), p31). Movies, music, books, this web site - all are information goods.
The internet has had a...
Seeking Alpha information on internet stocks
Future Lectures - Work in Progress
* Disintermediation and channel conflict
* Financial services
* PC sales
* Realtors
* How does your customer search?
* How much work is it to buy from you?
*...
The internet is a network of computer networks: that is, it is a way for computers to communicate with each other. To communicate, they all need to be able to "speak" the same language: TCP/IP. The...
This page is primarily about the structure of the online advertising industry. See internet marketing for tactics used to advertise online.
The Internet and the Advertising industry
According to an...
The internet is based on information technology, and information technology is full of technical terms. It's unfortunate, but unavoidable. Some terms you've probably heard but that you may not yet...
This page is mostly about how to do internet marketing. See Marketing for marketing basics. See the internet advertising industry for information about the key industry players and how internet...
Almost every business now has an internet presence - even my local dentist. Many internet businesses operate in traditional industries. Amazon.com is in retail.
But some internet businesses provide...
An internet strategy is a company's plan to exploit the internet. Internet strategy became a widely used term in the late 1990s when executives were asking themselves "what should we do about the...
You need to understand a little about how the internet works. One of the most basic concepts is that of clients and servers.
A browser is a piece of software that renders HTML into something you...
iTunes is the leading online music retailer.
Market Power
iTunes has become the dominant online retailer for music. That annoys the record labels, who would like to see more competition to reduce...
Who can join?
If you're enrolled in CBU3060.20 you should have an email invitation to join this site. If you haven't seen it, look in your junk mail folder.
Join!
So you want to become a member of...
Lecture 1 - Lecture 1 slides (to come)
Introduction to the course wiki: http://theinternetandbusiness.wikidot.com
Course admin, approach, description, class format, assessment, policies,...
Industry Analysis The Impact of the Internet on the Music Industry
Music
How the Internet has Changed the Workplace - Lecture 11 Slides
Outsourcing
Collaboration
Mass collaboration with wikis
Open source
Working with people outside the company
Job design
Business...
Lecture 2: Technology Fundamentals: Online Retailing Business Models
Very quick review of class survey results
Review of Homework 1
Review wiki basics
Web and internet technology...
Lecture 3 - Online Retailing Continued
Group Project
Review of Assignment 2
Finish analysis of DUB pies business
Introduce business strategy and explain why its important
Marketing strategy -...
Lecture 4 - Conclusion of Online Retailing: Introduction to Online Markets - Slides
Online Retailing - a new(ish) business model
Succesful internet retailer: Amazon.com
The long tail...
Lecture 5 Online Markets - Slides
Online marketplaces
Priceline.com, hotels.com, Orbitz.com etc.
Auctions
How they work; why the internet makes them easier
Counterparty risk - importance of...
Internet Marketing - Slides
Internet marketing is important
Advertising pays for much of the services and content offered on the internet
Similar to TV ads paying for TV shows and sporting event...
Information Businesses 1 - Slides
Review of midterm
Feedback from class captured on the IB blog - thank you!
Introduction to internet marketing
Internet Marketing - Slides
Group projects
Expectations, guidelines, hints
Online marketing tactics
Email
Newsletters
Display ads
E.g. The New York Times
Many format options
Increasingly...
Industry Analysis - The Impact of the Internet on the Newspaper Industry
Detailed lecture notes are on the PowerPoint slides
Be sure to check the slides for examples and sources for the Group...
Preliminary Outline - Lectures/Class Schedule - Content will Evolve
Each lecture will be anchored by a case study
(1/26/09) Lecture 1: selling online: costs, impact on business economics
(2/2/09)...
The value to your business of a customer over the life of your relationship. That value is measured in contribution to profit. For example, if a customer buys ten books from you over the life of...
The easier it is for a customer to find something, the more likely it will sell. That means that items that would not normally sell well offline might sell online. That's the reasoning behind the...
Market capitalization (often shortened to "market cap") is the market value of a company i.e. what you would have to pay to buy the whole company. The market capitalization of a public company is...
You can spend a fortune on marketing, but you still need a good product. Marketing is about more than advertising. It's about designing the product, setting the price, targeting potential buyers,...
A marketing strategy is a plan to get people to buy from you while achieving your financial objectives.
The Four Ps
Marketing strategy typically addresses "the 4 Ps" - product, price, promotion,...
Every time someone clicks on a link or publishes a blog or a Twitter tweet they are transmitting information to the world. That's a rich source of information for market researchers.
Smartphones...
Definition
The network effect is a phenomenon where the value of something to an individual increases with the number of people who chose the same thing. This situation typically occurs in...
place holder
Newspapers - A Business in Trouble
The internet has had a dramatic effect on the economics of newspapers and magazines. Almost all newspapers now offer extensive free content on the internet....
Feed from the New York Times Bits Section
This is what I want you to get out of this class:
Objectives
The objectives of this course are to:
Give you a sound understanding of the impact the Internet has had on business
Provide you with a...
A market is where buyers and sellers meet and transact. eBay, Monster.com and match.com are all online markets.
eBay is an online auction site that provides services to retailers. You can set up...
Online Retailing Slides
Industry Size
The National Retail Federation estimated that 2008 online sales would be $204 billion, with the largest segments being apparel ($26.6 billion), computers...
Course Objectives
The objectives of this course are to:
Give you a sound understanding of the impact the Internet has had on business
Provide you with a solid microeconomic foundation and a set...
Companies
InfoSys
Wipro
more to come
The internet makes it easier for organizations to outsource work that used to be done within the company, from accounting to computer programming. Even manufacturing is easier to outsource. U.S....
This is a page for ideas that have not yet found a home somewhere else.
Social Bookmarking
Things like Digg
Data Sources
http://www.comscore.com/
Economics Related Stuff
Here's an example of an...
Background
Source: Eisenmann, Thomas and Barley Lauren (2007). PayPal Merchant Services. Harvard Business School Case Study 9-806-188. Harvard Business School Press.
Founded in 1998 as a...
Two of the major players are Dell and Hewlett Packard. HP bought Compaq.
Dell Computer
Famous for direct sales model
Started using value added resellers more in 2006
Entered the blogosphere to...
Pets.com
U.S. spending on pets was $40.8 billion in 2007
U.S. sales of books were around $24.2 billion in 2006
See spreadsheet analyzing shipping costs: Petsdotcom.xls
Hit the Refresh button on...
SUNY Purchase has policies for academic integrity.
Cite all work that is not your own.
Cheating/ plagiarism will result in a grade of “F” for the test or project in question and a grade of...
Price Comparison Sites
Here's a list of top price comparison...
The internet has the potential to affect the price companies charge. More competition from other firms selling online will in theory force prices lower. Lower search costs through price comparison...
Profit equals revenue minus cost.
N.B when calculating revenues, costs and profits you must make sure all values refer to the same basis - per month, per year, per DVD etc.
Accountants and...
Blogs
Pet blogs: Itchmo, Pet Connection, and Pet Sit USA
Publishers experimenting with selling books by the chapter
There can be big money in blogs
One newspaper's list of the top 50 blogs
One NYT...
See Online Retailing
Revenue or Income
Revenue (also called gross income) is the money a company receives in a given period from sales of its goods or services. It includes everything the customer pays the company for,...
An April 2008 New York Times article about movie piracy explains how piracy is still an amateurish operation, and how movie makers are trying to fight back.
The Washington Post explained on August...
for playing in
Search cost is the cost of finding something. See this video about developing a way to search NetFlix movies for ones you'll like.
A successful transaction requires that a buyer and seller find...
Google
Google is everyone's darling business right now. The stock price is high, the company was rated the best company to work for, and it generates an enormous amount of positive media coverage....
Welcome page
What is a Wiki Site?
How to edit pages?
How do I join this site?
Site members
Recent changes
List all pages
Page Tags
Site Manager
IB Blog
www.learnprofit.com
Page...
Members:
Moderators
Admins
One appeal of the internet is that is seems to make it easier for anyone to start a business. Even artists are creating viable internet businesses1The attractions are obvious: potential worldwide...
Popular social networking sites include facebook and MySpace.
MySpace was bought by News Corporation. A 1/21/07 New York Times article described how News Corp has managed the acquisition, giving...
A 3/11/09 New York Times piece entitled "Be it Twittering or Blogging, it's all About Marketing explains how the owner of a wine business achieved a much better return in investment using Twitter...
No Set Text, but One Useful Reference…
A good reference for the economics of information technology is Information Rules (1999) by Carl Shapiro and Hal R. Varian. Varian is now Chief Economist...
here is the new page!
Well done Dennis!
This page is for your feedback on the course - in particular, how you think it could be improved. Note that this feedback is not anonymous. However, I appreciate constructive comments. You will...
Smalls, Yolanda
Tesser, Benjamin
Links to Student Pages
If you need help post a question on the Forum or ude.esahcrup|koorbaes.divad#rotcurtsni eht liame.
N.B. Only one person can edit this page at a time. That person gets a 15...
If you need help post a question on the Forum or ude.esahcrup|koorbaes.divad#rotcurtsni eht liame.
N.B. Only one person can edit this page at a time. That person gets a 15 minute page lock. If you...
**N.B. This is an OLD student page.
Can Edit Top Half Separately
Insert your name in this list - alphabetical order by surname please! - then insert the link to your new web page here
Alao, Femi -...
Links to Student Pages
If you need help post a question on the Forum or ude.esahcrup|koorbaes.divad#rotcurtsni eht liame.
N.B. Only one person can edit this page at a time. That person gets a 15...
Place holder for material on the impact of the internet on supply chains.
The supply chain refers to all the companies that produce inputs for a firm.
Switching costs are the costs of switching from one "product" to another. If you're a Mac user there are significant costs involved in switching to a PC (and vice versa). You will need to learn a...
The summary of 2008 report on US telecomms industry says that fixed wire subscriptions are dropping due to competition from VoIP, primarily from cable providers.
Simply searching "VoIP" in the New...
See the student group project The Internet and Television Wiki.
2008 Summer Olympics
The 2008 Olympics were a big test of internet television. NBC broadcast thousands of hours of content over the...
Test Page for Dennis A.
go ahead and edit this page
This is a big header
This is a smaller one
This is underlined text
Create a link just by typing the URL e.g. http://nytimes.com.
Or you can use...
This is a continuously-in-progress article about the internet and the music business. It's a fast-moving field, so I'm trying to keep the posts up to date.
Industry Sales
Record companies' revenue...
HTML
You can find HTML instruction and tag reference lists at www.w3schools.com/html.
Another good source is http://www.htmlcodetutorial.com/
Free Document Collaboration Tools
Google docs offers...
Home
Industries
Automotive
Blogging
Books
Education
Entertainment
Financial Services
Internet Advertising
Internet Services
Music
Newspapers
Online Markets
Online Retailing
Personal...
Trust is an issue with buying online. There can be a lot of scams. Here's an article about problems with quality of online vacation rentals
Business Model
As you would expect, Twitter is experimenting with ways to make money. Someone must see value in it, because Facebook made an offer to buy the company with stock. As of April 2009...
A value proposition is the value a business offers a potential customer. For example, McDonald's seeks to provide "quality, service, cleanliness and value."
A "viral" marketing message is one passed from one person to another, like a virus. It's "word of mouth" on steroids. Advertisers try to create something that people will want to share with their...
The web is not the same thing as the internet. The web is a set of interlinked documents formed by hyperlinks. Hyperlinks are an easy way to share information. You don't need to know anything about...
"Web 2.0" is an umbrella term for internet businesses that allow users to put content on the Web ("User Generaged Content" or UGC) is another term you'll hear. YouTube and Facebook are popular...
According to Wikipedia, the world largest wiki site:
A Wiki ([ˈwiː.kiː] <wee-kee> or [ˈwɪ.kiː] <wick-ey>) is a type of website that allows users to add, remove, or otherwise edit...
Social Networking
What to do when your boss is on Facebook.
BBC article on Twitter.
The Internet as a Source of Observations
Tools such as Spector and Track4Win allow employers to track employees'...
Slate article on how user-generated content sites actually cost money to run!
